Tobacco buyout in spotlight

Cecil H. Yancy Jr. Farm Press Editorial Staff | Jun 16, 2004

It's planting time in the northern Piedmont of North Carolina. The tobacco transplants have moved from the greenhouse to the ground. Sam Crews is full-throttle, making sure the family's 150 acres of tobacco get planted on time. Yet every other thought comes back to what's really on his mind.

“We're going to face a serious cut in quota if nothing is done,” says Crews, president of the Tobacco Growers Association of North Carolina. He farms with his brother, Jimmy, in Oxford, N.C.

“A buyout is on everybody's mind,” he says.

For Crews, as well as other tobacco growers, it amounts to a “holding pattern” for a tobacco buyout.

He likens his situation, and the tobacco industry, to that of a bleeding patient waiting for an operation — knowing that the doctor has been called, but hasn't yet arrived.

Since 1997, Crews, along with his fellow tobacco growers, has experienced the bleeding and about 52 percent of the tobacco quota he used to grow. A paper circulated by Blake Brown, North Carolina State University Extension agricultural economist, predicted an additional quota cut of 30 percent if the program is still in place by the end of the year.

“A lot of us won't be able to stay on the farm if that happens,” Crews says. “That includes us.”

Crews has watched his operation diminish from 206 acres in 1996 to about 150 this year.

He and his brother, Jimmy, are in partnership on the farm as well as the Granville Tobacco Warehouse, a Flue-Cured Stabilization Marketing Center station and an ag supply business in Oxford. In an effort to diversify their tobacco-growing operation, Crews contracts with Santa Fe Natural Tobacco Company to grow Pesticide Residue Clean tobacco.

They receive a 25-cent-per-pound premium to grow the reduced-residue tobacco. “We're basically doing what I did growing up on my daddy's farm,” Crews says. “We plant the tobacco and have a very few chemicals we can use. Sucker control is the biggest challenge. We have to go over it twice for sucker control. We have to store it separately and have to make some good decisions about harvesting so we can fill a barn at a time. The premium is based on quality.”

Standing beside his pickup truck, with his father, Roy Crews within earshot, Sam lets his mind wander back to what's on his mind. “The whole family worked together putting in tobacco and taking it out,” he says. “We always played by the rules. Now the program is starving all of us to death.”

Labor, rent and fuel costs are combining to erode the potential for profitability in tobacco.

In testimony before a Senate sub-committee chaired by U.S. Sen. Elizabeth Dole, R-N.C., in April, Crews said as much. Along with other tobacco leaders, Crews urged passage of a buyout, as well as a reform of the current tobacco program. “Our challenge is not to simply rectify flawed policy,” he testified, “ours is a complex arrangement of situations bound together by the federal tobacco program.”

As president of the Tobacco Growers Association of North Carolina, Crews stays in contact with the House and Senate leadership on a weekly basis, working with Graham Boyd, the association's executive director.

In testimony before the Senate sub-committee, Crews called the tobacco program a “relic whose merit is obvious and appreciated, but whose current incarnation is crushing us in the world market.” U.S.-grown tobacco is priced out of the global market, Crews says. “We are dangerously close to becoming a niche leaf producer for one major manufacturer.”

In a statement that could have been made in a hearing setting as well as a field setting, Crews says he's become “increasing disturbed” by the number of proud, yet, broke farmers that he personally knows. “For the past two years many of them have hung on hoping for a buyout.

“There are still major hurdles to overcome,” Crews says. “Obviously, we need it pretty soon.

After the buyout Crews hopes there will be a way to make an auction system work. “Sometimes it's hard to satisfy a foreign buyer with a contract situation. They may require different stalk positions.”

Moving back to what will happen if a buyout is not passed, Crews talks about the community at-large. “It's not only tobacco farmers that will be affected if we don't get some relief — fertilizer dealers, churches, volunteer fire departments and a whole lot of other people,” Crews says.

“The tobacco money turns over six or seven times in the community,” he says.